Switch to:
GuruFocus has detected 2 Warning Signs with DaVita Inc $DVA.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
DaVita Inc (NYSE:DVA)
Beneish M-Score
-2.64 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

DaVita Inc has a M-score of -2.64 suggests that the company is not a manipulator.

DVA' s Beneish M-Score Range Over the Past 10 Years
Min: -3.44   Max: -1.05
Current: -2.64

-3.44
-1.05

During the past 13 years, the highest Beneish M-Score of DaVita Inc was -1.05. The lowest was -3.44. And the median was -2.59.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of DaVita Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0393+0.528 * 1.033+0.404 * 1.0199+0.892 * 1.0699+0.115 * 1.007
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0251+4.679 * -0.0583-0.327 * 1.009
=-2.64

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Accounts Receivable was $1,917 Mil.
Revenue was 3715.742 + 3730.576 + 3717.651 + 3581.136 = $14,745 Mil.
Gross Profit was 1019.993 + 1032.947 + 1046.626 + 998.803 = $4,098 Mil.
Total Current Assets was $3,980 Mil.
Total Assets was $18,741 Mil.
Property, Plant and Equipment(Net PPE) was $3,175 Mil.
Depreciation, Depletion and Amortization(DDA) was $720 Mil.
Selling, General & Admin. Expense(SGA) was $1,593 Mil.
Total Current Liabilities was $2,696 Mil.
Long-Term Debt was $8,947 Mil.
Net Income was 157.726 + 571.332 + 53.382 + 97.434 = $880 Mil.
Non Operating Income was 0.667 + 1.876 + 3.215 + 2.976 = $9 Mil.
Cash Flow from Operations was 482.182 + 535.623 + 516.637 + 429.002 = $1,963 Mil.
Accounts Receivable was $1,724 Mil.
Revenue was 3533.589 + 3525.665 + 3434.618 + 3287.965 = $13,782 Mil.
Gross Profit was 1018.458 + 1024.65 + 988.542 + 925.353 = $3,957 Mil.
Total Current Assets was $4,503 Mil.
Total Assets was $18,515 Mil.
Property, Plant and Equipment(Net PPE) was $2,789 Mil.
Depreciation, Depletion and Amortization(DDA) was $638 Mil.
Selling, General & Admin. Expense(SGA) was $1,452 Mil.
Total Current Liabilities was $2,399 Mil.
Long-Term Debt was $9,001 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1917.302 / 14745.105) / (1724.228 / 13781.837)
=0.13002973 / 0.12510872
=1.0393

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(3957.003 / 13781.837) / (4098.369 / 14745.105)
=0.28711724 / 0.27794777
=1.033

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (3980.228 + 3175.367) / 18741.257) / (1 - (4503.28 + 2788.74) / 18514.875)
=0.61819023 / 0.60615343
=1.0199

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=14745.105 / 13781.837
=1.0699

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(638.024 / (638.024 + 2788.74)) / (720.252 / (720.252 + 3175.367))
=0.18618849 / 0.18488769
=1.007

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1592.698 / 14745.105) / (1452.135 / 13781.837)
=0.10801537 / 0.10536585
=1.0251

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((8947.327 + 2696.445) / 18741.257) / ((9001.308 + 2399.138) / 18514.875)
=0.62129088 / 0.61574523
=1.009

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(879.874 - 8.734 - 1963.444) / 18741.257
=-0.0583

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

DaVita Inc has a M-score of -2.64 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

DaVita Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
DSRI 0.92271.07790.95280.93161.05270.980.72560.94461.04911.0393
GMI 0.96031.03451.00941.0570.92430.98031.0491.05511.00061.033
AQI 0.95770.97230.97360.96961.09211.20850.95170.97690.92761.0199
SGI 1.07861.07521.07931.01811.08241.21611.4371.08761.07711.0699
DEPI 0.99160.9960.99891.02921.06071.01340.79851.00631.03721.007
SGAI 1.00420.75280.9691.05661.10631.06870.920.98591.06871.0251
LVGI 0.9210.96320.91551.04920.98631.03010.96020.95081.04431.009
TATA 0.012-0.0346-0.0328-0.0447-0.0792-0.0348-0.0669-0.0364-0.0674-0.0583
M-score -2.44-2.44-2.58-2.74-2.74-2.41-2.65-2.58-2.73-2.64

DaVita Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
DSRI 0.93310.94460.99930.99251.06831.04911.02611.04231.01481.0393
GMI 1.04451.05511.03691.03441.01391.00061.00111.00341.02121.033
AQI 0.94320.97690.95540.95660.95560.92760.97810.98061.00571.0199
SGI 1.12091.08761.08881.08341.08351.07711.07931.07941.07271.0699
DEPI 0.99811.00631.01391.01581.01531.03721.05851.04511.04051.007
SGAI 0.96540.98591.03021.04681.05481.06871.05121.03961.05871.0251
LVGI 0.95970.95080.98480.98371.00291.04431.02471.02851.00871.009
TATA -0.0529-0.0304-0.0445-0.038-0.0277-0.0674-0.0574-0.0917-0.0642-0.0583
M-score -2.66-2.56-2.61-2.59-2.49-2.73-2.67-2.82-2.70-2.64
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK